Last week the AARP Public Policy Institute (PPI) sponsored a Solutions Forum on Capitol Hill (view recording HERE) that put the spotlight on groundbreaking research showing how much social isolation—lack of meaningful contacts with others—costs the Medicare program.

In two separate panels, participants in the packed room heard from experts who discussed the global problem of social isolation—or lack of meaningful contacts with others—among older adults. Susan Reinhard, Senior Vice President at AARP kicked off the event with a compelling video that put a human face on the issue. The video illustrates the negative effects of not interacting with anyone for just one week.

Issue expert Lynda Flowers, Senior Policy Advisor with PPI, highlighted social isolation as the new silent killer—a major risk factor for a host of conditions, including heart disease, high blood pressure, and early onset dementia. Most notably, however, Flowers broke some big news from PPI’s recent study: social isolation costs the Medicare program $6.7 billion in additional spending every year.

AARP Foundation President, Lisa Marsh Ryerson underscored the negative impacts that isolation has on health—likening it to smoking 15 cigarettes a day—and the importance of identifying evidence-based solutions to address the problem. Notably, Ryerson drew attention to Connect2Affect, a multi-stakeholder collaboration with the AARP Foundation. Connect2Affect is a web-based resource that features tools to help people evaluate their risk for isolation, reach out to others who may be feeling lonely and disconnected, and find practical ways to reconnect to the community.

Other important takeaways that stand to change the way we look at and address social isolation:

Global perspective. Lina Walker—Vice President for Health Security at AARP, opened up the second panel by underscoring the global nature of the issue and highlighting the importance of collaborations and shared learning among national and international stakeholders. Janet Morrison, CEO of Independent Age and Chair of the Campaign to End Loneliness in the UK, discussed promising strategies being used in the UK to raise awareness of loneliness among older adults. Janet also highlighted social isolation as it relates to family caregiving.

Saving Medicare dollars. Tricia Neuman, a leading Medicare expert with the Kaiser Family Foundation, discussed the importance of identifying effective interventions. She said that such successes would enable Medicare to improve people’s health while at the same time save billions in Medicare spending.

Screening tool needed. Jonathan Shaw, a co-author of the PPI study from Stanford University and family practitioner at a California community health clinic, called for the development of a screening tool for social isolation that clinicians and lay people can easily use.

Medicare Advantage plan working on the issue. Offering the perspective of a private Medicare plan, Humana representative Sara Stevenson stressed the importance of identifying plan members who are socially isolated. She also revealed that Humana is now in the process of trying to identify solutions to alleviate isolation among its plan members.

An important public health concern. Julianne Holt-Lunstad, a leading researcher in the field from Brigham Young University, pointed out the importance of raising awareness of social isolation as an important public health concern. According to Holt-Lunstad, social isolation meets criteria established by the Centers for Disease Control and Prevention to be considered a public health issue.

Conclusion

AARP Executive Vice President and Chief Public Policy Office, Debra Whitman, closed the event with a strong call to action: get involved and elevate the issue, she urged. Lives depend on it. To be sure, the issue’s visibility got a boost from the event. The Forum was live streaming around the world and the event hashtag #socialisolation was trending #2 in the Washington, D.C. area. All in all, a great success!

Susan Reinhard is a senior vice president at AARP, directing its Public Policy Institute, the focal point for AARP’s public policy research and analysis. She also serves as the chief strategist for the Center to Champion Nursing in America, a resource center to ensure the nation has the nurses it needs.

Lina Walker is vice president at the AARP Public Policy Institute, working on health care issues.

The Medicare program requires higher-income individuals to contribute more toward the cost of the program than the general population. When enrolled in Medicare, people with incomes of $85,000 (or $170,000 for couples) pay higher premiums for Medicare Part B (doctors’, other health care professionals’, and outpatient services) and Part D (prescription drugs) coverage, including if they have a Medicare Advantage plan. Over time, the proportion of people with Medicare who pay higher premiums for Medicare Part B and Part D has grown significantly.

Unfortunately, Congress is once again asking Medicare beneficiaries to pay even more, as a way to offset congressional spending on non-Medicare programs. Raising premiums on higher-income seniors, often referred to as “income-related premiums”, is bad policy. Shifting more costs onto this group of older Americans ignores how much they’ve already contributed to Medicare throughout their working lives, as well as how much they continue to contribute to Medicare through additional taxes. Furthermore, this change could drive these beneficiaries – who help contribute to the overall health of Medicare – out of the Medicare program. Congress already raised income-related premiums in 2015, and that increase will be taking effect in 2018. Asking Medicare beneficiaries to pay for non-Medicare benefit changes again will make it even harder to finance improvements and address long-term challenges in the Medicare program.

The Medicare program is already heavily income related. Currently, approximately 7 percent of beneficiaries are subject to the higher-income premiums for Part B, and approximately 6 percent of beneficiaries are subject to the higher income premiums for Part D. The higher income premium rises with income, with the highest premium – over 3 times the premium for the typical retiree – beginning at $160,000 (single) and $320,000 (couple) in 2018. While a typical senior will pay over $2,000 annually in premiums for Part B and D coverage, a high-income senior can be expected to pay over 3 times that amount – more than $6,400 annually. The income-related premium, in essence, is a premium tax on higher income seniors.

Second, higher income beneficiaries have already paid more into the system in the form of higher payroll taxes – unlike Social Security, all wage income is subject to the Medicare payroll tax without a cap. A 1.45% payroll tax is levied on both employers and employees; thus, 2.9% of total wages goes to Medicare. A typical worker earning $50,000 contributes (both employer and employee share) about $1,450 a year (2.9%). A person earning $85,000 – the threshold for income-related premiums – contributes $2,465 per year. While someone at $214,000 – the top threshold for income related premiums – contributes $6,206. In addition, for those earning wages above $200,000 (single) and $250,000 (couple), an additional 0.9% tax applies on amounts above those thresholds that goes to Medicare.

Given higher payroll taxes and current income-related premiums, we should not further single out higher income beneficiaries for higher premium payments. Shifting more and more costs onto higher-income beneficiaries could cause them to leave the Medicare program. If the beneficiaries in the highest income groups are asked to pay an even greater share of their Medicare premium, they could decide not to enroll in Medicare and seek alternative sources of insurance. This would worsen the Medicare risk pool, leaving more costly beneficiaries in the Medicare program, raising costs for everyone else.

Third, higher income seniors also pay higher taxes on their Social Security benefits for Medicare. For seniors with incomes above $34,000 (single) and $44,000 (couple), an additional 35% of Social Security benefits are subject to the income tax, with the revenue dedicated to Medicare. A typical Social Security benefit of $16,320 – with 35% of it taxed at the 28% rate – would pay another $1,600 per year into Medicare.

Finally, income-relating in the Medicare program hurts new Medicare enrollees. When determining who is subject to the income-related premium, the Medicare program relies on the beneficiary’s tax return from the prior year (which reports income made from the year before) – which means income data are at least 2 years old. Thus, new retirees (whose income may have dropped precipitously from their working years) are subject to higher income-related premiums based on their previous wages, not their current financial situation.

Additional income-relating of premiums is the wrong solution for addressing Medicare’s long-term financial challenges, and asking Medicare beneficiaries to fund non-Medicare changes will only make it more difficult to address Medicare’s own financial issues. Any contribution from Medicare beneficiaries should be used to strengthen and improve the Medicare program.

The Medicare program requires higher-income individuals to contribute more toward the cost of the program than the general population. When enrolled in Medicare, people with incomes of $85,000 (or $170,000 for couples) pay higher premiums for Medicare Part B (doctors’, other health care professionals’, and outpatient services) and Part D (prescription drugs) coverage, including if they have a Medicare Advantage plan. Over time, the proportion of people with Medicare who pay higher premiums for Medicare Part B and Part D has grown significantly.

Unfortunately, Congress is once again asking Medicare beneficiaries to pay even more, as a way to offset congressional spending on non-Medicare programs. Raising premiums on higher-income seniors, often referred to as “income-related premiums”, is bad policy. Shifting more costs onto this group of older Americans ignores how much they’ve already contributed to Medicare throughout their working lives, as well as how much they continue to contribute to Medicare through additional taxes. Furthermore, this change could drive these beneficiaries – who help contribute to the overall health of Medicare – out of the Medicare program. Congress already raised income-related premiums in 2015, and that increase will be taking effect in 2018. Asking Medicare beneficiaries to pay for non-Medicare benefit changes again will make it even harder to finance improvements and address long-term challenges in the Medicare program.

The Medicare program is already heavily income related. Currently, approximately 7 percent of beneficiaries are subject to the higher-income premiums for Part B, and approximately 6 percent of beneficiaries are subject to the higher income premiums for Part D. The higher income premium rises with income, with the highest premium – over 3 times the premium for the typical retiree – beginning at $160,000 (single) and $320,000 (couple) in 2018. While a typical senior will pay over $2,000 annually in premiums for Part B and D coverage, a high-income senior can be expected to pay over 3 times that amount – more than $6,400 annually. The income-related premium, in essence, is a premium tax on higher income seniors.

Second, higher income beneficiaries have already paid more into the system in the form of higher payroll taxes – unlike Social Security, all wage income is subject to the Medicare payroll tax without a cap. A 1.45% payroll tax is levied on both employers and employees; thus, 2.9% of total wages goes to Medicare. A typical worker earning $50,000 contributes (both employer and employee share) about $1,450 a year (2.9%). A person earning $85,000 – the threshold for income-related premiums – contributes $2,465 per year. While someone at $214,000 – the top threshold for income related premiums – contributes $6,206. In addition, for those earning wages above $200,000 (single) and $250,000 (couple), an additional 0.9% tax applies on amounts above those thresholds that goes to Medicare.

Given higher payroll taxes and current income-related premiums, we should not further single out higher income beneficiaries for higher premium payments. Shifting more and more costs onto higher-income beneficiaries could cause them to leave the Medicare program. If the beneficiaries in the highest income groups are asked to pay an even greater share of their Medicare premium, they could decide not to enroll in Medicare and seek alternative sources of insurance. This would worsen the Medicare risk pool, leaving more costly beneficiaries in the Medicare program, raising costs for everyone else.

Third, higher income seniors also pay higher taxes on their Social Security benefits for Medicare. For seniors with incomes above $34,000 (single) and $44,000 (couple), an additional 35% of Social Security benefits are subject to the income tax, with the revenue dedicated to Medicare. A typical Social Security benefit of $16,320 – with 35% of it taxed at the 28% rate – would pay another $1,600 per year into Medicare.

Finally, income-relating in the Medicare program hurts new Medicare enrollees. When determining who is subject to the income-related premium, the Medicare program relies on the beneficiary’s tax return from the prior year (which reports income made from the year before) – which means income data are at least 2 years old. Thus, new retirees (whose income may have dropped precipitously from their working years) are subject to higher income-related premiums based on their previous wages, not their current financial situation.

Additional income-relating of premiums is the wrong solution for addressing Medicare’s long-term financial challenges, and asking Medicare beneficiaries to fund non-Medicare changes will only make it more difficult to address Medicare’s own financial issues. Any contribution from Medicare beneficiaries should be used to strengthen and improve the Medicare program.

Elizabeth “Izzy” Barnett, 80, is a full-time caregiver for her husband, Bob, who has dementia. They have no children or family to help and Izzy has lost contact with friends because she is busy taking care of Bob. Izzy’s is not alone in this situation. Millions of older adults are socially isolated—in other words, they lack meaningful relationships with family and friends. Life circumstances—losing a spouse, friends, and loved ones, or retirement—put older adults at increased risk for isolation.

New AARP Public Policy Institute Report Links Social Isolation to Increased Medicare Spending

While we’ve known for a long time that isolation is associated with poorer health, no one had examined whether there is a link between social isolation and Medicare spending. Now, a new report from the AARP Public Policy Institute finds that an estimated 14 percent of older adults enrolled in Traditional Medicare (or 4 million people) are socially isolated, costing the federal government almost $7 billion in additional spending every year. And this number would be much larger if you add in people enrolled in private Medicare plans (Medicare Advantage).

We’re not sure what causes the link between social isolation and greater Medicare spending, but one possibility could be that socially isolated individuals do not have the support they need to stay healthy in their homes and communities, and instead rely on more costly hospital or skilled nursing facility care. What’s more, people who are socially isolated may be sicker before finally going to see a health care provider, driving up the cost of care.

A Start to Fixing the Problem

Social isolation is increasingly being recognized as a significant health and public health issue. Despite this, clinicians do not have a way to reliably and efficiently screen socially isolated individuals. Nor do we have public health surveillance strategies to help us understand the problem at a population level. What’s more, even if we could effectively screen individuals and collect good population-based data, we really don’t know what works in terms of alleviating isolation. Here are some strategies that federal, state, and local governments and the private sector can take to begin to address the problem:

Fund the development of a reliable and efficient tool to screen patients for isolation;

Establish public/private partnerships to identify and test interventions that can alleviate isolation; and,

Recognize social isolation as an important social determinant of health as well as a critical public health problem that should be addressed through the investment of federal, state, and local government resources.

The Public Policy Institute’s report puts numbers to the reality of Izzy’s story, as well as that of millions of other older adults. Social isolation can be a hidden problem, but new evidence of the cost should encourage greater attention to the issue and support for solutions to improve the lives of older Americans.

Lynda Flowers is a Senior Strategic Policy Adviser with the AARP Public Policy Institute, specializing in Medicaid issues, health disparities and public health.

Claire Noel-Miller is a Senior Strategic Policy Adviser for the AARP Public Policy Institute, where she provides expertise in quantitative research methods applied to a variety of health policy issues related to older adults.

The budget blueprint recently passed by the House proposes to redesign Medicare—the program that nearly all Americans ages 65 and older and millions of younger people with disabilities rely on for health coverage. The proposal would transform Medicare into what’s termed a “premium support” or “voucher” program. This change would have a huge impact on people with Medicare today and in the future.

Premium support would be a dramatic change from the current Medicare design. Today, if you want to enroll in traditional Medicare, you would pay the same premium for Part B (which covers doctors’ visits), and typically have no premium for Part A (which covers hospital services) regardless of where you live. In addition, you could choose traditional Medicare or enroll in one of the private health plans (called Medicare Advantage plans) available in your location.

With premium support, however, you would instead get a specified dollar amount (or voucher) to use toward buying health coverage. You would have to choose between competing plans—which would include private health plans and traditional Medicare coverage—each with its own price. The amount you pay will be the difference between the price of the plan and the voucher, so if you choose a higher-priced plan, you would pay more than if you choose a lower-priced plan.

In addition, you would likely have fewer choices under a premium support program—and the available options would differ dramatically depending on where you live. While proponents argue that premium support would enhance opportunities for people with Medicare to choose a coverage option that matches their preferences, a new AARP-funded research report by the Urban Institute challenges this claim. As shown in the report (and AARP Public Policy Institute summary), premium support would reduce—not increase—options for individuals, compared with what they have now:

Many people who prefer traditional coverage—the option that most people with Medicare choose today—would see steep increases in their premiums. As a result, many would have to either pay much more for their preferred option or choose something else.

In some locations, the premiums for traditional Medicare would be so expensive that it would be unaffordable for most people and thus not a real option for them.

In other places, private plans—which are now available in nearly all locations and chosen by about one-third of people with Medicare—would be more expensive than traditional Medicare. In some markets, private plans would not be able to attract enough enrollees to be successful, so individuals living in those places would no longer have this option.

The current combination of Medicare Advantage and traditional Medicare promotes private plan competition and offers individuals a choice of options. In contrast, premium support would place a large burden on the vulnerable Medicare population and force many people into a plan based on affordability. Under premium support, traditional Medicare’s current wide choice of physicians, hospitals, and other providers would likely only be available to higher-income people in some locations, while private plans would cease to exist in others.

Harriet Komisar, Ph.D., is a senior strategic policy advisor at the AARP Public Policy Institute, where she works on Medicare and other health care topics.

Recent policy conversations related to the American Health Care Act (AHCA) have focused on proposals that would eliminate the Affordable Care Act’s critical protection for people with preexisting conditions. This controversial proposal has drawn a lot of attention for good reason. Eliminating this important protection, which keeps insurance companies in the individual (non-group) market from considering health status when making coverage decisions, could hurt millions—especially older adults who tend to develop more health conditions as they age.

But the preexisting condition protection is not the only serious concern. The proposed legislation would also make huge cuts to Medicaid by taking $880 billion out of the program by 2026. How? By, among other things, fundamentally changing the way the program is funded. Under the AHCA, Medicaid funding would move from a federal guarantee to match all legitimate state expenditures on health care and long-term services and supports (LTSS) for eligible beneficiaries, to a capped payment system that would give states a fixed dollar amount per enrolled beneficiary.[i] Although per enrollee caps respond to changes in enrollment, they do not respond to increases in health care costs attributable to medical or pharmaceutical innovation, nor do they respond to other changes in the health care environment that could affect per enrollee spending. Health care costs, we all know, are notorious for their rapid rise. The result: an ever-widening gap between cost and funding.

The impact of such a huge loss of federal Medicaid funds on people with disabilities and poor seniors will be devastating—especially for 11 million Medicare beneficiaries who are also eligible for Medicaid. These individuals—called dual eligibles, or duals—are the poorest and sickest of all Medicare beneficiaries and rely on Medicaid for critical LTSS services, like help with toileting, bathing, and eating.

Faced with major losses of federal funding for their Medicaid programs, states would have limited options. They could plug the funding hole with state revenues, which is unlikely given competing demands on state budgets. States could also cut provider rates, which could lead to significant access problems for beneficiaires because many providers may choose not to serve the Medicaid population. States could also eliminate optional eligibility categories, including some that provide access to LTSS. Finally, states could reduce or eliminate access to optional services, including home and community-based LTSS. Limiting access to needed LTSS for dual eligibles will most surely result in increased use of emergency room and hospital services, ultimately shifting costs to the Medicare program—creating a “pay me now or pay me later” situation for the federal government.

Rather than take billions of dollars out of Medicaid and shift significant costs to Medicare and states, it is time to have a reasoned conversation about how to improve the program in ways that don’t leave gaping holes in the health care safety net that millions of people and their family caregivers rely on.

[i] States have the option of receiving block grant funding for children and non-elderly, non-disabled adults. Block grants are fixed amounts of money that do not respond to changes in enrollment or program costs.

Lynda Flowers is a Senior Strategic Policy Adviser with the AARP Public Policy Institute, specializing in Medicaid issues, health disparities and public health.